Genesis: BIS launches green finance project using blockchain

Rick Steves

The results of the tests and prototypes will be published in the fourth quarter of 2021.

The Bank for International Settlements is having its Hong Kong innovation hub starting its first green finance project, Genesis.

While green finance has been under development for years, this project intends to use tokenize green bonds to enable real-time tracking of environmental outputs.

BIS has formed a consortium with six partner companies that will design the digital infrastructure for the Genesis project.

Digital Asset (Switzerland) and GFT Technologies Hong Kong will deploy multiple permissioned blockchains to target the full bond lifecycle.

The Liberty Consortium – consisting of SC Ventures, Standard Chartered Bank, and Shareable Asset – will use a public permissionless blockchain infrastructure.

Allinfra, a Hong Kong SAR startup, will provide technology verified data that can track in real-time the positive environmental impact of projects.

The development teams have moved from design thinking workshops to iterative sprints in order to build the prototypes. The results of the tests and prototypes will be published in the fourth quarter of 2021.

Bénédicte Nolens, head of the BIS Innovation Hub Hong Kong Centre, commented: “Our vision is that you can download an app to your phone, and invest any amount into safe government bonds, which will develop a green project – let’s say a solar or wind farm. Over the bond’s lifetime, you would be able to not just see accrued interest, but also track in real-time how much clean energy is being generated, and the consequent reduction in CO2 emissions linked to your individual investment. Further, you could sell the bonds in a transparent market.”

The Bank of International Settlements has recently opened its fourth innovation hub in London in a push for upgraded infrastructure and for the study of central bank digital currencies (CBDC).

The BIS already has innovation hubs in Singapore, Hong Kong, and Switzerland. These innovation hubs are into different areas of study but their main focus is on CBDCs and the opportunities offered by them for the banks and also for the users.

The hubs have other areas of study that include the use of innovation to improve regulation and supervision, improving and upgrading financial market infrastructure to make it ready for the next-gen, open finance, cybersecurity, and green finance.

Green finance has quickly grown in popularity as governments are pressing on capital markets and technology firms to decarbonize the global economy as fast as possible in order to tackle global warming.

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